When people rise to CEO or, say, managing director of the IMF, they can fall prey to a psychological condition known as CEO disease. It's a term that describes "the isolation that envelops a leader when subordinates become reluctant to disclose bad news or worst-case scenarios that might trigger a shoot-the-messenger response."

These powerful people will begin to feel they can move past barriers and even break the law. When subordinates established a pattern of not sharing when things are bad, the behavior continues unchecked.

To guard against CEO disease, open and honest communication in an company is essential.